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Dec-30-2009Rescue fund reportedly to backstop JAL bankruptcy(topic overview)
CONTENTS:
- Shares of Japan Airlines Corp fell as much as 11 percent to renew a record low on Tuesday as investor worries mount the carrier will be restructured in bankruptcy court as part of a state bailout. (More...)
- Shares in Japan Airlines tumbled to within a hair's breadth of their all-time low yesterday amid grow-ing speculation that the company will end up being restructured in a court under the country's corporate rehabilitation law. (More...)
- Shares in Japan Airlines have plunged as investors fear the airline will be forced to declare bankruptcy. (More...)
- The Enterprise Turnaround Initiative Corp of Japan is expected to decide on whether to support JAL next month. (More...)
- Sources have hinted that a Government-backed bail-out fund might put the carrier through bankruptcy court, if it decides to support the ailing operator. (More...)
- The 9,500-strong union, known as JAL Friendship & Improvement Organization, or JALFIO, reached the decision because changing the pension system is "a necessary step" at present, and cuts in benefits would help the recovery of the airline, which is "the source of welfare," the sources said. (More...)
- The ETIC can draw on 1.6 trillion yen ($17.36 billion) in state-guaranteed funding in the current fiscal year to March to make loans and investments, and its budget is expected to total 3 trillion yen in the following year. (More...)
- The ETIC is considering supporting JAL in coordination with a filing for court protection under the Corporate Rehabilitation Law, which is similar to Chapter 11 in the United States, sources familiar with the matter have told Reuters. (More...)
- The sources said the body briefed the creditor banks on a plan focusing on bankruptcy. (More...)
- Already groups of retirees are lobbying others, urging acceptance. (More...)
- The carrier, which will raise approximately USD439 million from the exercise, will issue the shares to state-owned enterprise, Hainan Provincial Development Holding, and the carrier's parent, HNA Group. (More...)
- JAL was saddled with 1.5 trillion yen in total liabilities as of the end of September. (More...)
- Bankruptcy proceedings usually lead to a sharp cut in the payment of sales receivable and other creditor claims. (More...)
- The broader Topix index lost 0.1 percent to 915.18, with more than two stocks falling for each that rose. (More...)
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Shares of Japan Airlines Corp fell as much as 11 percent to renew a record low on Tuesday as investor worries mount the carrier will be restructured in bankruptcy court as part of a state bailout. The stock slide was prompted by media reports that a state-backed turnaround fund now weighing whether to support JAL with loans and investments was considering a bankruptcy filing as one component of its restructuring plan. [1] TOKYO (Reuters) - Shares of Japan Airlines Corp tumbled as much as 32 percent to a record low on Wednesday as expectations grew the struggling carrier will be restructured in bankruptcy court as part of a state bailout. Sources have told Reuters that a state-backed turnaround fund is considering using a bankruptcy procedure as part of its revival plan for the carrier, a move that would likely wipe out the value of its shares. A bankruptcy could also complicate talks with American Airlines and Delta Air Lines, which are courting JAL with rival offers of investment to gain access to its network in Asia and closer ties on U.S.-Japan routes. [2] TOKYO (Reuters) - Shares of Japan Airlines Corp ( 9205.T ) fell more than 19 percent to a record low on Wednesday on growing investor worries the struggling carrier could be put through bankruptcy court as part of a state bailout. Sources have told Reuters that a state-backed turnaround fund now weighing whether to bail out JAL is considering using a bankruptcy procedure similar to Chapter 11 in the United States as part of its revival plan. [3]
TOKYO, Dec 29 (Reuters) - Japan's Nikkei stock average eked out a four-month closing high on Tuesday, with trading firms such as Mitsui & Co ( 8031.T ) rising after gains in oil and metals prices. Japan Airlines Corp ( 9205.T ) fell 8.3 percent after media reports that a state-backed turnaround fund now weighing whether to support JAL with loans and investments was considering a bankruptcy filing as one component of its restructuring plan. [4] JAL is seeking an out-of-court mediation on loans, as planned, in a procedure known as "alternative dispute resolution." Under the arrangement, it is discussing with its lenders the possibility of delaying loan repayments so it can continue daily operations until it has drawn up a restructuring plan. JAL in October asked quasigovernmental investment fund Enterprise Turnaround Initiative Corp. for support in restoring its operations. ETIC, which has access to as much as 1.6 trillion yen in state-guaranteed funds and the ability to purchase the debts of beleaguered companies, is now assessing JAL's assets to gauge its level of support and will decide whether to help JAL's turnaround next month. Buffeted by a business- and leisure-travel slowdown triggered by the global economic downturn, JAL reported its fourth straight quarter of net losses in the July-September period. It scrapped its earlier earnings forecast for the current fiscal year through March, saying it couldn't gauge its future course as it compiles a revival plan. Major creditors, including state-backed Development Bank of Japan; Mizuho Financial Group Inc.' s wholesale banking unit, Mizuho Corporate Bank; and ETIC declined to comment on whether they are studying bankruptcy protection for JAL's restructuring. [5] The Enterprise Turnaround Initiative Corp. of Japan, charged with the reconstruction of the cash-strapped airline, also submitted a separate proposal that includes the option of a debt waiver of more than 200 billion yen by JAL's creditor banks, including the state-owned Development Bank of Japan, the sources said. ETIC plans to decide on a financial package for JAL, possibly by late January, but whichever of the two schemes it chooses, the government will fully support JAL to ensure there are no disruptions to the carrier's flight operations either at home or abroad, they added. [6]
Transport minister Seiji Maehara meanwhile held consultations with top officials of the creditor banks, including Mizuho Corporate Bank, and requested that the banks provide full financial support for the airline. The government-backed Enterprise Turnaround Initiative Corp. of Japan is expected to finalize its JAL support plan by late January. The body will likely be focusing its efforts on a plan that would call on JAL to file for court protection under the Corporate Rehabilitation Law or other frameworks before receiving funds from the body for its turnaround efforts. [7]
The debt-ridden carrier, which is currently seeking its fourth government bailout since 2001, may be put through a Chapter 11-style bankruptcy procedure by The Enterprise Turnaround Initiative Corp., a state-backed turnaround body overseeing Japan Airlines' restructuring. JAL's possible bankruptcy news follows recent proposals by both American Airlines ( AMR ) and Delta Air Lines ( DAL ) over the last several weeks to put $1 billion into Japan's flagship carrier. [8] A STATE-backed turnaround body overseeing Japan Airlines restructuring is considering bankruptcy as one option for the cash-strapped carrier, reports said overnight. Proposals submitted to JAL's creditors by the Enterprise Turnaround Initiative Corp include filing for protection from creditors to give the airline time to put its finances in order, the Nikkei business daily said. Debt-ridden JAL, seeking its fourth Government bailout since 2001, aims to avoid bankruptcy proceedings. [9]
Maintaining bankruptcy as a clear option on the table means that outcome permutations multiply. A 28-Dec-2009 report in the Nikkei suggested that the Enterprise Turnaround Initiative Corporation of Japan (ETIC) has now told the Development Bank of Japan and three major banks that they should be prepared for JAL to file for protection from creditors under the Corporate Rehabilitation Law. [10] The state-backed Enterprise Turnaround Initiative Corp of Japan (ETIC) has told creditors in meetings over the past few days that it may push JAL to use Japan's Corporate Rehabilitation Law, a process similar to a Chapter 11 bankruptcy in the United States. [11]
Japan Airlines Corp (JAL), Asia's leading airline by revenue, had, in October this year, applied for help from the Enterprise Turnaround Initiative Corp of Japan (ETIC). The latter is a competent body of turnaround specialists established particularly to rescue corporations with state-guaranteed funding. [12]
The final decision as to whether ETIC will support JAL with loans and investments is expected to come next month only. Should the ETIC choose to lend a hand to JAL in its revival; the latter will file for protection from creditors under the Corporate Rehabilitation Law, a process similar to Chapter 11 in the U.S and employed in large, complicated cases in Japan. Under this scheme, ETIC will become a prospective sponsor of the airline, lenders will be expected to waive debt and JAL's pension commitments will be abridged. Till something concrete emerges for the carrier, Japan Airlines will put in abeyance, its plans of integration with Nippon. Earlier the two companies had planned to merge their air cargo businesses. Those plans put on the backburner at least till July of next year; JAL intends to increase rates on regular cargo flights serving the U.S. and Europe by 10 percent to 15 percent immediately. [12] The airline secured a 100 billion yen bridge loan from a state-affiliated bank and is trying to persuade staff and retirees to accept pension cuts as it battles to avoid collapse. It has also received competing investment offers from Delta Air Lines Inc. and American Airlines. Japan Air shares have declined 69 percent this year, the biggest drop on the Nikkei 225 Stock Average, which has risen 20 percent. [13] Shares of JAL were down 9 yen at 87 yen in midafternoon in Tokyo, after renewing a record low of 85 yen marked in late November. The stock has lost nearly 60 percent of its value this year. The chances of bankruptcy appeared to increase last week when Finance Minister Hirohisa Fujii said the state would not back any more loans to JAL. Banks are wary of extending fresh loans to JAL unless the state insures them against losses. A bankruptcy could complicate talks with American Airlines and Delta Air Lines, which are courting JAL with rival offers of investment to gain access to its network in Asia and closer ties on U.S.-Japan routes. [1]
The bankruptcy procedure would likely render JAL shares worthless while also causing bigger losses for the airline's main creditors, which include Japan's three largest private lenders, than in a private, out-of-court restructuring. A bankruptcy could also complicate talks with American Airlines (AMR.N: Quote ) and Delta Air Lines (DAL.N: Quote ), which are courting JAL with rival offers of investment to gain access to its network in Asia and closer ties on U.S.-Japan routes. [11]
Local media have reported that the state-backed body overseeing JAL's restructuring is considering filing for protection from creditors as one possibility for the cash-strapped carrier. Bankruptcy protection can enable a company to restructure its debts with creditors and implement other measures to emerge stronger, as seen with ailing U.S. auto giant General Motors. It can also mean that shareholders will see the value of their investment wiped out. JAL, which lost about 1.5 billion dollars in the six months to September, has said it plans thousands of job cuts and a drastic reduction in routes as part of its efforts to return to profitability. It has been offered financial assistance by both American Airlines and Delta Air Lines, who are competing to take a minority stake in the Japanese carrier, eyeing its coveted Asian landing slots. [14]
'''We believe a change in the pension system is necessary for JAL'''s restructuring,''' Hideshi Takahashi, general secretary of the Japan Airlines Workers''' Union, said by telephone today. Members will still decide individually whether to vote for or against the cuts, he said. Tokyo-based Japan Air aims to cut pensions by 50 percent for its 16,000 current employees and 30 percent for its 9,000 retirees as part of cost-cutting plans designed to return the carrier to profit following three losses in four years. [15] The airline has eight unions. Japan's top airline, suffering from heavy losses, has sent out letters to its retirees and current workers to seek their approval for cuts to their pension benefits and is expected to receive their replies by Jan. 12. JAL aims to cut pensions by 50 percent for its 16,000 current employees and 30 percent for its 9,000 retirees as part of cost-cutting plans designed to return the carrier to profit following three losses in four years. [16]
The body plans to make a final decision after consulting with JAL's main creditor banks on whether to proceed with the airline's turnaround process using the Corporate Rehabilitation Law or an out-of-court restructuring mainly through a debt waiver. According to the sources, ETIC President Hiroshige Nishizawa on Friday met with JAL's senior executives and told them it is studying the two proposals. Japan's top airline, heading for its fourth annual loss in five years, has sent out letters to the company's retirees to seek their approval for substantial cuts to their pension benefits and is expected to receive their replies by Jan. 12. [6] The airline, known as JAL, is still considering an out-of-court restructuring, as it indicated last month, the person said. The prospect of a court-led turnaround procedure is likely to add pressure on the company's retirees to accept a proposed cut in their pension allowances. JAL is seeking to persuade more than two-thirds of about 8,800 retirees'''the necessary ratio to change its corporate pension system under the current law'''to accept a benefits-reduction plan. [5]
I believe all the stakeholders are prepared for the bankruptcy scenario.''' Japan Air spokesman Satoru Tanaka declined to comment on the Nikkei report, saying the company is focusing on revising its pension system and developing its restructuring plan. A spokesman for the Enterprise Turnaround Initiative Corporation, who declined to be identified, said he had no comment. [17] The Enterprise Turnaround Initiative Corporation submitted a plan to the Development Bank of Japan and three of the carrier's other lenders over the weekend, yesterday's Nikkei report said, citing an unidentified person familiar with the matter. [18] As we reported yesterday, the Enterprise Turnaround Initiative Corporation of Japan (ETIC) has now told the Development Bank of Japan and three major banks that they should be prepared for JAL to file for protection from creditors. [19] This will allow the Enterprise Turnaround Initiative Corporation of Japan, or ETIC, to provide loans and investment for JAL's daily flight operations, even if the airline is forced to apply for court protection from creditors, the paper said. [20]
Once a decision is reached, the Enterprise Turnaround Initiative Corporation of Japan will be able to invest in and extend financing to JAL, thus giving significant financial backing to the carrier. Even if the carrier is forced into legal liquidation, which would include application of the Corporate Rehabilitation Law, the corporate turnaround body will place JAL under its control through the assistance decision, ensuring the airline is not forced to halt all of its flights due to a funds shortfall. [21] Sources told Reuters on Monday the Enterprise Turnaround Initiative Corp of Japan has told creditors it may look to have JAL use Japan's Corporate Rehabilitation Law, a process similar to Chapter 11 that could wipe out the value of JAL's shares. [1] Enterprise Turnaround Initiative Corp (ETIC), which has been overseeing JAL's reconstruction, is discussing the possibility with JAL's creditors. The Japanese carrier, headed for its fourth annual loss in five years, also has plans to lay off employees and reduce routes for economic viability. It has also sent out letters to past employees to seek approval to reduce pension benefits. [22] No one at the ETIC was immediately available for comment. JAL, Asia's largest carrier by revenue, is headed for its fourth annual loss in five years, hit by the global downturn in travel and a bloated cost base that makes it less efficient than domestic rival All Nippon Airways Co. It is also struggling to get the two-thirds approval it needs from employees and retirees for cuts in their pension payouts so that it can get its pension shortfall of about 330 billion yen down to a more manageable size. A Chapter 11-style bankruptcy would allow the ETIC to deal with creditors and various parties in a transparent manner, and could also be used to slice pension benefits if the carrier is unable to secure approval on its own. Some of JAL's creditors remain wary of a court-led workout because it could trigger bigger losses on their loans. [2]
Shares of Japan Airlines sank as much as 32 percent to a record low of 60 yen on Wednesday amid mounting concerns that it would be restructured in bankruptcy court as part of a state bailout. Its shares lost 11 percent yesterday, as investors feared that bankruptcy would wipe out the value of the carrier's shares and lead to a sharp cut in payment of sales receivables and other creditor claims. [23] Gains were limited as Japan Airlines (JAL) at one point tumbled 32 percent to a record low of 60 yen on growing investor worries the struggling carrier will be restructured in bankruptcy court as part of a state bailout. [24]
Shares of Japan Airlines fell as much as 11% yesterday to revisit a record low, of JPY85 reached in late Nov-2009, on investor concerns that the carrier would be restructured in bankruptcy court. [25]
Shares in troubled Japan Airlines (JAL) plummeted by 11% today to a record low of 85 yen amid reports that the carrier could be forced to file for bankruptcy. The stock has lost almost 60% of its value this year. [26] Shares in Japan Airlines were trading at 97 yen on the Tokyo Stock Exchange. Carrier's stock has already lost more than 50 per cent its value so far this year. [27] The airline'''s shares fell 1 percent to close at 96 yen on the Tokyo Stock Exchange. Japan Air has declined 55 percent this year, the biggest drop in the Nikkei 225 Stock Average. [17] TOKYO (Reuters) - Japan's Nikkei average is poised to book gains for 2009, with shares of high-tech exporters having led a rebound rally on a weaker yen and as economic stimulus measures helped turn around the world economy. On the Tokyo stock market's final trading day of the year the Nikkei was showing a rise of about 20 percent for 2009, following a 42 percent plunge -- the biggest loss in its 58-year history -- last year when investors saw the global financial crisis take a heavy toll on risky assets including stocks. The benchmark was flat by mid-afternoon on Wednesday after rising to a four-month high as high-tech exporters such as Canon Inc received a boost from a weaker yen. [24]
Tokyo stocks fell Wednesday morning after the Nikkei index touched a new four-month intraday high, as a soured mood from Japan Airlines' plunge to a record low outweighed initial gains from a weaker yen on the final trading day of the year. [28] TOKYO, Dec 30 (Reuters) - Japan's Nikkei stock average edged down 0.3 percent after touching a four-month high on Wednesday, with a plunge by Japan Airlines Corp (9205.T: Quote, Profile, Research ) on bankruptcy worries offsetting exporter gains made on a weaker yen. [29]
TOKYO, Dec 30 (Reuters) - A government-backed turnaround fund plans to guarantee Japan Airlines' ( 9205.T ) fuel payments and other commercial transactions if the carrier is restructured in bankruptcy court, the Nikkei newspaper reported on Wednesday. [30] Tokyo, December 28 -- Going through the bankruptcy court may well be an option for Japan Airlines Corp (9205.T) if it goes in for a state-backed turnaround fund. [12]
Dec. 28 (Bloomberg) -- Japan Airlines Corp., Asia'''s biggest carrier by sales, may seek bankruptcy proceedings among its options in a turnaround plan proposed by a state-affiliated agency, Nikkei English News said. [17] Dec. 30 (Bloomberg) -- Japan Airlines Corp., Asia's biggest carrier by sales, plunged to a record in Tokyo trading after reports the carrier may enter bankruptcy proceedings led investors to sell shares on the year's last trading day. [13] TOKYO — Fears deepened Wednesday about the future of debt-ridden Japan Airlines, with shares in Asia's biggest carrier plunging by a quarter on fears it might file for bankruptcy, dealers said. JAL, battered by the global recession and swine flu pandemic, is scrambling to slash costs and seeking its fourth government bailout since 2001 to keep flying in the face of mounting losses. [14]
According to sources in the Ministry of Land, Infrastructure, Transport and Tourism ( MLITT ), the government is considering a bankruptcy option which would keep the airline operating, in a Japanese form of U.S. style Chapter Eleven creditor protection. They don't want to see JAL stop flying, but a protected bankruptcy operation would necessarily involve a considerable downsizing, in order to satisfy future lenders and investors. Tokyo's tabloid newspapers have been predicting all this week that JAL will fold early in the New Year, but, while it cannot be counted out, this may still be a premature judgment. JAL's shares have slumped to their lowest level this year, ending yesterday down 8.3% at JPY88, as investors feared a devaluation of their holdings under a bankruptcy scenario. [19]
The bankruptcy procedure would likely render JAL shares "worthless", according to Mitsubishi UFJ Securities, while also causing increased losses for the airline's main creditors and complicating talks with potential foreign partners, American Airlines and Delta Air Lines. [25] JAL handles more than half of the air traffic in Japan. A bankruptcy could also complicate talks with American Airlines and Delta Air Lines, which are courting JAL with rival offers of investment to gain access to its network in Asia and closer ties on U.S.-Japan routes. [31] Last week, Finance Minister Hirohisa Fujii said the state would not give the airline any more loans. It has been bailed out by the Government four times since 2001. American Airlines and private equity firm TPG offered $1.1 billion of investment to JAL and this followed a $1 billion lifeline from Delta Air Lines and its Sky Team alliance partners. American and Delta are both keen to hook up with JAL with a view to acquiring its profitable Asian landing slots. [26] The airline secured a 100 billion yen bridge loan from a state-affiliated bank and is trying to persuade staff and retirees to accept pension cuts as it battles to avoid collapse. It has also received competing investment offers from Delta Air Lines Inc. and American Airlines. [17]
The voting on the pension reduction will end on Jan. 12. The desired agreement on the revised pension program will be crucial for JAL's revival, as it aims to slash its net debt and legacy pension costs of more than one trillion yen, or roughly $11 billion. The airline said two weeks ago that it expects to obtain approval of the proposal, since a survey conducted by the company showed 65% of its retirees agreed to the plan. A court-led revival plan is adding pressure, as it would force them to accept reduced benefits, anyway. Transport Minister Seiji Maehara reiterated earlier this month that the government is still considering a bill to allow JAL to change its pension plan to reduce its obligations. JAL's fate was clouded last week when Finance Minister Hirohisa Fujii said the government has no plans to guarantee loans to the struggling companyfrom its budget despite earlier agreement by five key ministers that the government would consider the guarantees. The finance minister's remark could be a warning to the airline's retirees, since he has repeatedly cautioned that the government wouldn't provide the guarantees unless JAL reduces its retiree benefits. [5] AMR has teamed up with TPG and other Oneworld partners to offer JAL $1.1 billion, and says it could come up with more if needed. American hopes to get antitrust immunity for its partnership with JAL. But before that can happen, JAL and the Japanese government must work out a rescue plan for JAL and then decide whether to love the one they're with or go with a new partner. One might question the importance of this is the cosmic scheme of things. If American is unsuccessful in keeping JAL as its partner, it sets back the slow progress made over the past 20 years in gaining access to Asia. Aviation analyst Mike Boyd suggests that American may win by losing JAL, however - if it can pick up a strong Chinese airline as its Asia partner within the next five years. [32] A number of media, including the Nikkei business daily, are reporting that the Japanese government is considering taking its huge flagship carrier JAL into bankruptcy. The news follows recent proposals by both American ( AMR ) and Delta ( DAL ) over the last several weeks to put $1 billion into JAL. Their motivation: to get special access to JAL routes throughout Asia. [33]
JAL's new management will make the final decision on possible capital alliances with Delta Air Lines Inc. (DAL) and AMR Corp.' s (AMR) American Airlines, the report said. The two U.S. airlines are jostling to partner with JAL to gain access to its lucrative network of flights to Asia. [20] Delta Air Lines Inc. and AMR Corp.' s American Airlines are also closely watching developments of JAL's restructuring process. The two big U.S. airlines are battling to cement a partnership with their Japanese peer to gain access to its lucrative network of flights to Asia. [5]
American Airlines couldn't get a break in 2009, and Delta Air Lines helped make the year miserable for American in Asia. [32]
Two American airlines, Delta Air Lines (DAL.N) and American Airlines (AMR.N) have also made offers of financial aid to the besieged airliner. [12]
Japan Airlines has rival offers from American Airlines and Delta to buy a stake in the firm. [34]
A corporate turnaround body has proposed to the main creditor banks of Japan Airlines Corp. that the carrier's rehabilitation should focus on court-backed bankruptcy proceedings rather than an out-of-court restructuring centering on a debt waiver, sources said Tuesday. [7] Dec. 30 (Bloomberg) -- Most Japanese stocks fell as Japan Airlines Corp. tumbled on reports the carrier'''s biggest lenders oppose a plan to restructure the company through bankruptcy. [35] Dec. 29 (Bloomberg) -- Japan Airlines Corp., Asia's biggest carrier by sales, fell the most in five weeks after reports said a state-affiliated agency may seek bankruptcy for the unprofitable company. [18]
Dec. 29 (Bloomberg) -- Japan Airlines Corp. '''s biggest union will support a proposal by the carrier to cut pensions for current employees as the unprofitable company seeks to avoid collapse. [15] The leadership of the largest labor union of Japan Airlines Corp. plans to accept a company proposal to cut pension benefits substantially to help the ailing airline turn itself around, according to union sources. [16]
The Japan Airlines Workers''' Union has 9,500 members. Earlier this month, two of Japan Air'''s other unions also agreed to pension cuts. [15]
Japan's government has ruled out allowing JAL to collapse. JAL Asia's largest airline by revenue has said it plans to cut thousands of job as well as apply a drastic reduction to its routes as part of its efforts to return to profitability. [8] JAL, which is Asia's largest airline with regards to revenue, had applied for help from the Enterprise Turnaround Initiative Corp of Japan in October. [36] Japan Airlines applied for a bailout in late October from the Enterprise Turnaround Initiative Corp of Japan (ETIC), an organization of turnaround specialists that can draw on state-guaranteed funding to offer financial aid to ailing firms. [2] The Enterprise Turnaround Initiative Corp - a state-backed fund - was asked in October to help out the debt-laden Japan Airlines. [34]
People familiar with the matter said that the Enterprise Turnaround Initiative Corp of Japan has suggested that bankruptcy would be the best option for the struggling airline. [27]
Japan Airlines applied for a bailout in late October from an organisation of turnaround specialists who can draw on government funding to support ailing firms. This body- the Enterprise Turnaround Intiative Corp. Of Japan, will reportedly guarantee the airline's operational transations if it does file for bankruptcy. Such transactions include the purchase of fuel, spare parts and other items needed for flight operations. [37] Japan's Japan Airlines may seek bankruptcy reorganisation as part of a turnaround plan, the Nikkei business daily says. [38] A government-backed corporate turnaround body has told Japan Airlines Corp. that it is considering the option of liquidation as part its rehabilitation plan, according to sources close to the matter. [6] Debt-ridden Japan Airlines Corp may consider liquidation as an option in its restructuring plan. [22]
The ETIC has told JAL's creditors that it was considering a plan under which the airline would apply for court protection under the Corporate Rehabilitation Law, but it has not ruled out a private, out-of-court restructuring, sources have said. [2] Sources familiar with the matter state that the ETIC has discussed, at length, the issue of restructuring at JAL with the carrier'''s creditors. As of now, both the options, that of using a Chapter 11-style bankruptcy procedure or a restructuring outside of bankruptcy court, have been kept open. [12] The organization will decide as early as next month whether to support JAL. The group has discussed with JAL'''s creditors the possibility of using a bankruptcy procedure along with fresh loans and investment, but it has not ruled out a restructuring outside of bankruptcy court, the two people said. [31] The ETIC has reportedly discussed the possibility of using a "Chapter 11-style bankruptcy procedure" with the creditors of JAL, if the body decides to support the carrier, but a restructuring outside of the court has not been completely ruled out yet. [36]
The Nikkei business daily reported that a government-backed turnaround fund plans to guarantee the struggling carrier's fuel payments and other commercial transactions if the company is restructured in bankruptcy court. "There's still a lot of uncertainty about what's going to happen to JAL, and this is inviting selling," said Tomomi Yamashita, a fund manager at Shinkin Asset Management. [29] The Nikkei reported on Wednesday that JAL's fuel payments will be guaranteed by the government-backed turnaround fund, the ETIC, if the carrier files for bankruptcy. [23]
JAL lost 25 percent to 66 yen. Sources have told Reuters that a state-backed turnaround fund now weighing whether to bail out JAL is considering using a bankruptcy procedure similar to Chapter 11 in the United States as part of its revival plan. [24] JAL has also been affected by the outbreak of swine flu and the airline posted a net loss of 32.3 billion yen for the July to September period, compared with a 40.1 billion yen profit a year ago. The airline has been seeking an injection of public funds to strengthen its capital as it restructures under the watchful eye of a state-backed turnaround body. [26] There are risks including the possibility of JAL being asked to make transactions using only cash for fueling activities abroad, which would make it necessary for the airline to raise up to 600 billion yen in funds. That would, in effect, require a massive injection of funds bigger than that involving a debt waiver. [6]
ETIC has also submitted an alternative proposal that includes the option of a debt waiver of more than 200 billion yen by JAL's creditor banks, including the state-owned Development Bank of Japan, reports quoting sources said. [22] The corporation has already presented JAL and its main banks with several options for rehabilitation, which are predicated on the corporation's financial aid. Key among the rehabilitation options is private liquidation, which would involve coordination with concerned groups such as financial institutions, with the carrier's debt totaling more than 250 billion yen to be minimized through a debt waiver and other measures. [21]
A state-affiliated agency charged with rescuing Japan Air met creditors yesterday to discuss a proposed bankruptcy, the Yomiuri newspaper said, without citing anyone. Japan Air owed its four main lenders, including Mitsubishi UFJ Financial Group Inc., at least 529 billion yen ($5.8 billion) as of July. [13] The state-owned Development Bank of Japan and the country's three private mega banks; Mitsubishi UFJ Financial Group (8306.T), Mizuho Financial Group (8411.T), and Sumitomo Mitsui Financial Group (8316.T) are JAL's main creditors. "The market consensus seems to be they will never let JAL go bust, and the impact of JAL's problems on the overall economy has already largely been factored in," said Hiroaki Kuramochi, chief equity marketing officer at Tokai Tokyo Securities. [12] The Tokyo-based airline's biggest creditors also include Mizuho Financial Group Inc., Sumitomo Mitsui Financial Group Inc. and the state- affiliated Development Bank of Japan. [13]
Mitsubishi UFJ Financial Group Inc., Japan'''s largest bank by market value, led declines by banks, losing 0.9 percent. Yamaha Motor Co., world'''s second-largest motorcycle maker, slumped 2.7 percent after Citigroup Inc. cut its rating on the shares. [35] Showa Denko K.K. jumped 4.5 percent, rising the most in the Nikkei 225 Stock Average, after the chemical company was rated '''strong outperform''' in new coverage by Mitsubishi UFJ Financial Group Inc. [35] Mitsubishi UFJ Financial Group fell 0.2 percent to 453 yen and Mizuho Financial Group slipped 1.2 percent to 165 yen. [24]
Shares in Japan Airlines tumbled to within a hair's breadth of their all-time low yesterday amid grow-ing speculation that the company will end up being restructured in a court under the country's corporate rehabilitation law. JAL shares lost 8.3 per cent to Y88, just one yen higher than the all-time low of Y87 they reached last month. [39] Japan Airlines is battling 1.5 trillion yen of debt ($16bn; £10bn). It has been bailed out by the government four times since 2001. Its shares have slumped nearly 60% this year. [34] Shares in Japan Airlines tumbled as much as 11% on Tuesday, touching a new low of 85 yen. [34]
The DPJ government's decision last weekend to go back on an earlier "understanding" by five cabinet ministers to provide financial support to Japan Airlines (JAL) is possibly pivotal in the way the saga will play out. It implies that, despite some apparent wavering, the new government has recaptured its resolve to play it tough with the flag carrier. [10] There is no immediate threat of default on loans, after JAL announced last week that it had raised new loans to cover imminent bond redemptions. The impact of increased loan costs will however weigh heavily on the airline's future, given its extremely high debt burden. The major banks which have been persuaded to support JAL in recent months are reportedly less than pleased by the news that there is now to be no government guarantee for their loans. [19]
Last week Finance Minister Hirohisa Fujii said the government would not guarantee funding to JAL, whose banks, which include the state-owned Development Bank of Japan and the country's top three lenders, are wary of extending fresh loans without the state's backing. [8]
The chances of the bankruptcy increased last week when Finance Minister Hirohisa Fujii said the state would not back any more loans to JAL. The concern among stockholders is that they will lose all the value of their shares if JAL ends up going through bankruptcy court. [40] "There's a lot of concern about what might happen if JAL does end up going through bankruptcy court, what will happen to shareholders if the stock basically becomes worthless," said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities. [1]
Japan Airlines plummeted more than 30 per cent as investors were concerned that the embattled carrier would be restructured in bankruptcy court. [41] Japan Airlines Corp., the biggest Asian carrier by sales, may seek bankruptcy protection as proposed by a government-affiliated agency. [27]
Dec. 29--TOKYO -- A state-backed corporate turnaround body has begun coordinating views with concerned parties with an eye to deciding on its financial assistance to the cash-strapped Japan Airlines thus formally putting the carrier under its management in mid-January, according to sources. [21]
Japan Airlines (JAL) has forecast a total of 419,407 international passenger reservations during the Japanese New Year vacation period from December 25, 2009 to January 5, 2010. [42] On domestic routes, JAL has forecast that seat supply will be 2.3% lower than the same period in the previous year and expects the total number of domestic passenger bookings to be 1,321,173 reservations, 6.7% down on last year. The projected load factor on domestic Japan flights during this festive period is 61.8%. During this period, JAL Group plans to operate an additional 119 domestic flights to meet demand on popular routes in Japan, such as Tokyo - Miyazaki, and Tokyo - Kagoshima. [42] One group, the Japan Cabin Crew Union, said it wouldn't comment unless it had confirmed the discussions with company management. Other unions couldn't be reached. JAL shares dropped 8.3% to 88 yen (about 96 U.S. cents) after falling to their lowest level for the year of 85 yen during the day. [5] The shares slid to 60 yen at one point, the lowest level since JAL merged with Japan Air System Co. in 2002. "Speculation is rife that JAL may face court-led proceedings, which could result in its delisting" from the Tokyo Stock Exchange, said Kazuhiro Takahashi, equity information chief at Daiwa Securites SMBC. [14] Japan Air dropped as much as 11 percent to 85 yen and traded at 87 yen as of 1 p.m. on the Tokyo Stock Exchange. It was the biggest decline among more than 1,600 companies in the MSCI World Index. [18]
Tokyo'- Stocks in Tokyo edged down in Wednesday morning trading after climbing on a weaker yen as Japan Airlines plunged to a record low. [41] JAL's stock was down 25 percent at 66 yen at the midday break in Tokyo, after tumbling earlier to a record low of 60 yen. [2] Shares of JAL closed down 8.3 percent after touching a record low of 85 yen hit in late November. The stock has lost nearly 60 percent of its value this year. [11] High-tech exporters led gains in the Japanese market in 2009, while banking shares lagged behind, hurt by worries about equity financing as well as growing fear that JAL might go bankrupt. The Tokyo stock market's electrical machinery index has gained about 40 percent this year, outperforming a gain of around 6 percent in the Topix index and a more than 20 percent slide in the banking index. [24]
JAL'''s stock fell 1 percent to ''96, versus a 1.3 percent gain in the benchmark Nikkei average. ''''''The market consensus seems to be they will never let JAL go bust, and the impact of JAL'''s problems on the overall economy has already largely been factored in,'''''' said Hiroaki Kuramochi, chief equity marketing officer at Tokai Tokyo Securities. [31]
Stocks in the Japanese benchmark are valued at 38 times estimated earnings, compared with 18 times for the S&P; 500 and 16 times for the Stoxx. Today is this year'''s last day of trading in Japan. The Nikkei 225 Stock Average plunged 73 percent to yesterday'''s close from its intraday record high of 38,957.44 on the last trading day of 1989. [35] The euro traded at 1.4340-4342 dollars, slightly down from 1.4348-4358 dollars Tuesday and at 131.91-95 yen, down from 132.20-24 yen. Wednesday is the last trading day of the Tokyo Stock Exchange for this year. [41]
In North Asia, shares in Hainan Airlines gained 3.7% yesterday, after the carrier received conditional approval from regulators for a share placement of 595 million A listed shares on the Shanghai Stock Exchange. [25] Media reports that bankruptcy is one option for the cash-strapped carrier have spooked investors, who sent shares in the airline crashing 25 percent to 66 yen in morning trade, after an 8.3 percent dive on Tuesday. [14] Rehabilitating the company without bankruptcy reorganization would require agreement from creditors who were owed at least 529 billion yen ($5.8 billion) by the Tokyo-based airline as of July. '''Bankruptcy would be the best option because it'''s simple,''' said Mitsushige Akino, who oversees the equivalent of $450 million at Tokyo-based Ichiyoshi Investment Management Co. '''If we listen to the all stakeholders, there won'''t be any progress on restructuring, and if takes too much time, its corporate value will be damaged. [17] Including capital reinforcement to rebuild JAL's capital base, the corporation is expected to extend assistance to the tune of several hundred billion yen. Regarding corporate restructuring, JAL plans to cut 45 loss-making domestic and international flight routes, as many of its 286 affiliated firms and subsidiaries as possible, and at least 10,000 jobs across JAL Group. [21]
The sources said ETIC is planning to provide about 200 billion-300 billion yen in funds to JAL under either scenario. JAL, for its part, will be asked to scrap about 45 international and domestic routes and lay off about 9,000 people. [6] JAL, choking on 1.5 trillion yen (USD16 billion) in debt and crippling pension costs, applied for assistance from the ETIC in late October. [1] JAL was saddled with 1.5 trillion yen ($16.4 billion) in total liabilities as of the end of September. At that level of debt, its bankruptcy would be the 6th biggest ever in Japan, ranking just below the 2001 collapse of retailer Mycal. [11]
JAL is burdened with a heavy debt of $15 billion and has been facing $3.6 billion pension shortfall. It had requested for a bailout from the ETIC earlier in October. JAL has projected as many as 419,407 international passenger reservations during from Dec. 25 this year to Jan. 5 of next year. [27] ETIC has concluded that JAL can revive itself within three years, and has presented four scenarios to JAL and its lenders based on out-of-court restructuring that include more than Y250 billion worth of debt waivers, the report said. [20]
Heading into 2010, next year could be one of significant restructuring in the airline industry particularly if debt-burdened carriers like JAL face stagnant revenue as passengers continue to stay on the ground. [33]
While a bankruptcy filing has become a strong possibility, the ETIC has not ruled out a private, out-of-court restructuring in coordination with JAL's creditors, sources with knowledge of the matter have told Reuters. [30] In addition to talks with creditors, the E.T.I.C. also met with JAL representatives over the weekend and explained that bankruptcy was being considered as an option, the two people said. They requested anonymity because of the sensitivity of the negotiations. [31] If the company fails to obtain the necessary two-thirds approval from the retirees to implement the pension reform, ETIC is expected to use the bankruptcy option, but if it succeeds in clinching approval, JAL plans to strongly urge ETIC for a rehabilitation plan centering on a debt waiver. [6] There is a risk JAL would not be able to make payments for fuel, parts and other transactions needed to keep flying. The ETIC plans to keep paying for such transactions if JAL files for bankruptcy, the Nikkei newspaper reported on Wednesday, adding that airport usage fees and insurance policy premiums would also be guaranteed. [2]
According to the Nikkei, ETIC would then become a potential "sponsor" of the airline. This reverses what had previously looked like a near-certain underwriting of JAL by the government, in order to avoid the unpredictability inherent in a collapse. [19] In the event of bankruptcy and any sharp reduction in airline size, the government would be anxious not to allow a scramble for any airport slots consequently released at Tokyo's capacity constrained airports. As both ANA's and (prospectively) JAL's anti-trust immunity applications for inter-airline cooperation on Pacific routes are heard in the U.S., authorities there will be anxious to ensure that any reallocation is performed transparently. That for example was not the case when the 10,000 new Narita slots for use from Mar-2010 were recently simply reallocated en bloc to ANA. [19] Japan's government has ruled out allowing JAL to collapse, but has left the door open to possible bankruptcy proceedings to allow the group to restructure more easily. [14] Japan's top banks, JAL's main creditors, fell amid growing investor worries about the struggling carrier's possible bankruptcy. [24] "Investors are selling on fears that the rights of existing shareholders won't be protected" if JAL files for bankruptcy protection, said Mitsuru Miyazaki, an analyst at SMBC Friend Research Center. JAL retirees are in the process of voting whether to accept a 30% reduction in their benefits proposed by the carrier. [5]
Shares of JAL were down 19.3 percent at 71 yen as of 0021 GMT (7:21 p.m. EST), a record low for the carrier. [3] '''JAL'''s share price is approaching zero because people are worried about excessive liabilities,''' said Tsutomu Yamada, a market analyst at kabu.com Securities Co. '''If JAL files for legal liquidation, banks lending money to the carrier won'''t be able to avoid losses.''' [35] The shares closed down 8.3% on a day that saw 133 million shares changing hands (compared with a daily average over the past years of 17.1 million shares). JAL's share price has lost nearly 60% of its value this year. [25]
Shares in Japan Airlines have plunged as investors fear the airline will be forced to declare bankruptcy. [37] Japan's top bank Mitsubishi UFJ has already raised about 1 trillion yen through a new share issue. [24]
The Enterprise Turnaround Initiative Corp of Japan is expected to decide on whether to support JAL next month. [23] A bankruptcy is the preferred option of the Enterprise Turnaround Initiative Corporation, which is charged with rescuing the Tokyo-based carrier, the Asahi newspaper reported today, without citing anyone. [18] Bankruptcy is the preferred option being pursued by the agency, known as the Enterprise Turnaround Initiative Corporation, the Asahi newspaper reported yesterday, without saying where it got the information. [13]
Sources have hinted that a Government-backed bail-out fund might put the carrier through bankruptcy court, if it decides to support the ailing operator. [36] The record low occurred as news filtered through that the carrier would probably be restructured in bankruptcy court as part of a state bailout. [40]
The renewed uncertainty creates ever-widening ripples. The new bankruptcy concerns appear certain to force a downgrading of the carrier's credit rating, and already the premium it must pay to insure its loans has increased significantly; credit default swap margin spreads have reportedly widened by as much as 40 basis points. [19]
TOKYO'''Japan Airlines Corp., its major lenders and a quasigovernmental investment fund are studying a bankruptcy filing for the carrier if it doesn't win concessions from retirees, according to a person familiar with the matter. [5] Local media reports suggested that a state-backed fund was considering whether it should support JAL with loans and investments. [40] If legal liquidation is pursued, it would make it possible for JAL to drastically reduce liabilities, including corporate bonds, and make it easier for the company to seek shareholder responsibility including the option of delisting. If ETIC announces its support at the same time as the option is being used, it would help to alleviate uncertainties about JAL's future and make it easier to obtain public understanding for the injection of public funds using taxpayers' money. [6]
"If JAL really were to file for bankruptcy, that would cause chaos. At this moment I think the chance of a JAL bankruptcy is still quite small", said Kotaro Toriumi, an Airline Analyst and Professor at Josai International University. Both ETIC and JAL have declined to comment on the speculations, neither confirming, nor denying them. [36] In JAL's case -- -- one of the ten largest airlines in the world by most measures -- a bankruptcy would make it the first major airline bankruptcy in years. [33] Against the same period last year, JAL forecasts an overall improvement of 9.1 percentage points in load factor as a result of the predicted 11.6% decline in the number of international passenger reservations on JAL Group airlines alongside an estimated 20.9% decrease in capacity measured in available seat kilometers. [42] Market analysts say the big banks have been hit by a combination of concern about JAL and worry that Mizuho and Sumitomo Mitsui Financial Group might be forced into equity fundraising early next year. [24] While reassessing the carrier's assets, the corporation had been studying whether it should extend financial aid to JAL. The corporation has concluded that the rehabilitation of the carrier will be possible in about three years if it gains cooperation from its creditors, including megabanks. [21]
In lieu of the funds, the U.S. carriers will get a bigger toehold in Japan and the access to JAL's set-up in the rest of Asia. [12] The U.S. carriers' motivation is to get a greater foothold in Japan and access to JAL's network to the rest of Asia. [8]
The 9,500-strong union, known as JAL Friendship & Improvement Organization, or JALFIO, reached the decision because changing the pension system is "a necessary step" at present, and cuts in benefits would help the recovery of the airline, which is "the source of welfare," the sources said. [16] Members will still decide for themselves whether to vote for or against the cuts, said Hideshi Takahashi, general secretary of the union. Earlier this month, two of JAL's other unions also agreed to pension cuts. [16]
Many JAL retirees now feel that acceptance of the company's demand to cut pensions is inevitable. [19]
If the plan goes ahead, lenders could be asked to waive debt and JAL's pension obligations could be reduced. JAL also will delay linking its air cargo operations with Nippon Yusen KK until at least July pending decisions on the turnaround, Nikkei said. [38] Japan'''s Vice Transport Minister Sumio Mabuchi declined to provide specifics on the turnaround plan at a press conference in Tokyo today, saying only that the rehabilitation agency is continuing to review ways to rescue Japan Air. [17] Japan Air's lenders opposed bankruptcy in yesterday's meeting, according to the Yomiuri's report. [13] Japan'''s government has pledged to keep Japan Air operating as it bails out the unprofitable carrier for the fourth time since 2001. [17] Japan Air officials were unavailable for comment due to a holiday, according to a person answering the phone at the carrier's head office. [13]
Japan Air fell as much as 32 percent to 60 yen and traded at 66 yen as of 11 a.m. local time. [13] "We've heard that the ETIC will decide in January, and we are not aware of the matters that are reported in media," said Satoru Tanaka, a spokesman for Japan Air. [18]
The ETIC can draw on 1.6 trillion yen ($17.36 billion) in state-guaranteed funding in the current fiscal year to March to make loans and investments, and its budget is expected to total 3 trillion yen in the following year. [2] ETIC is able to purchase debt from, invest in and provide loans to companies saddled with liabilities deemed excessive and can raise up to 1.6 trillion yen in government-guaranteed funds for the current business year through March. [6]
Sources close to the development said Monday that the government has decided to nearly double the upper limit of ETIC'S access to state-guaranteed investments and loans to 3 trillion yen for fiscal 2010. [6]
The ETIC is considering supporting JAL in coordination with a filing for court protection under the Corporate Rehabilitation Law, which is similar to Chapter 11 in the United States, sources familiar with the matter have told Reuters. [30] Worried about the risk to JAL'''s operations during that period, the E.T.I.C. is considering ways to accelerate the process. These could include seeking approval to bypass some of the processes usually required, one of the sources said. [31]
The E.T.I.C. is considering a plan that would involve JAL'''s filing for reorganization under a Japanese system that can prove lengthy, sometimes taking several years to complete. [31] In a year when AMR is expected to lose well over $1 billion, it is being forced to offer an equity investment in JAL to counter Delta's offer of a $500 million investment. [32] Delta was offering the strength of Delta's Tokyo hub and U.S.-Japan route, most of which it acquired when it merged with Northwest Airlines in 2008. The effort has forced American to spend a lot of time and effort in Tokyo to press its argument that JAL would be better off staying with American and Oneworld. [32] Delta in September began wooing financially troubled Japan Airlines, which has been a long-time partner of American and a full-fledged member of the Oneworld global airline alliance since 2007. [32] All attempts made to save Japan Airlines Corp from falling into a crisis even more intense than the one it is currently facing are proving ineffective. [36]
The sources said the body briefed the creditor banks on a plan focusing on bankruptcy. The banks, however, expressed opposition because it would increase the amount of debt they would be required to waive and would also disrupt the airline's business transactions overseas, the sources said. [7] The airline plans to use the funds to repay bank loans and supplement existing capital. [25]
Mr Kan believes that taxpayers' memories will stretch that far - and, importantly, that the electorate would not look favourably on a costly intervention on behalf of the airline (and its staff) when all others are suffering from the downturn. Both Mr Fujii and Mr Kan were members of the five minister team who in Nov-2009 had agreed on a JAL bailout, but they have now changed direction, refusing to guarantee the airline's loans. [19]
Already groups of retirees are lobbying others, urging acceptance. They are making phone calls, sending e-mails and faxes in a frenzy of activity. One of the factors behind their urgency is that same recently changed tone of the government's attitude to JAL's restructuring. A group of some 30 former JAL Vice Presidents, now retired, yesterday emailed around their retired colleagues, urging acceptance of management's proposed pension reduction. [19] "We are pursuing the possibility of restructuring without bankruptcy," JAL spokesman Kojiro Waki said. [9] A decision is due in January, but sources have told Reuters that it was considering a bankruptcy filing as part of the restructuring plan. [34] "We have the impression that somebody needs to take responsibility in order to move JAL's restructuring plans forward. Worries are growing among shareholders," he said. [14]
The scramble to sell may yet be reversed, especially if the airline' pensioners act quickly to agree to cuts in their entitlements (see below), as a more orderly out of court restructuring is still a real option. [19] The airline industry has routinely used bankruptcy as a way to cut debt obligations and renegotiate labor contracts. [33] s main unions support a proposal to cut pensions as the airline battles to avoid collapse, the Asahi newspaper reported, without citing anyone. [43]
The airline needs the support of two-thirds of retirees and employees to back the reduction, part of wider cost-cutting plans designed to return the company to profit. [43]
The company has posted three losses in four years and reported a net loss of 63.2 billion yen in the fiscal year ended March 31 as international travel slumped amid a global recession. [13] "Weakening in the yen and a gradual recovery in the economy and growing demand for companies helped buoy the market in time for the year-end," said Naoki Koga, a senior fund manager at Toyota Asset Management. "But domestic-demand sectors, on the other hand, fell out of favor this year due to uncertainty about the government's policy. [24] Even if the retirees do reach the necessary agreement, JAL remains precariously perched on a knife-edge, a position that becomes more dangerous - and complicated - with each day. It seems that, whatever happens now, the government is going to find itself unpopular on all sides, as it seeks to navigate a course between undermining a national icon, offending major bank creditors and alienating popular opinion by using taxpayer funds to extricate itself from this complex, multi-dimensional problem. [19] The ETIC is expected to decided whether JAL is worthy of public funds in January. [1] The ETIC is expected to make a decision on whether to support JAL next month. [2] The body, which was established in October, has so far received requests for financial support from around 130 companies in addition to JAL. [6]
Last week, the Ministry allocated all of JAL's proposed new slots to All Nippon Airways (over the cries of other domestic competitors). As JAL reduces capacity - presumably more severe in case of bankruptcy - its existing slots also will become available. Presumably any prospect of U.S. antitrust immunity for the "new" JAL and its partners will depend on transparency in their allocation, just one of the many dimensions of this massively complex transaction. [10]
The volume of shares sold was five times the daily average for the past three months. "Shareholders are becoming convinced that bankruptcy will be the case," said Mitsushige Akino, who manages the equivalent of $450 million at Tokyo-based Ichiyoshi Investment Management Co. "They are dumping the stock. [13] "Investors are dumping the shares all at once on speculation the agency will go with bankruptcy," said Minoru Matsuno, president of Value Search Asset Management Co., a Tokyo-based investment advisory firm. [18]
The carrier, which will raise approximately USD439 million from the exercise, will issue the shares to state-owned enterprise, Hainan Provincial Development Holding, and the carrier's parent, HNA Group. [25]
Japan'''s Transport Minister Seiji Maehara on Dec. 25 repeated a pledge to keep the carrier in business, saying the government '''will take necessary measures, including securing funds, to ensure safe and stable flight operations.''' [17] The airline, which is Asia'''s largest carrier, has been struggling amid the global economic downturn which has led to a slump in demand. [26]
JAL was saddled with 1.5 trillion yen in total liabilities as of the end of September. [2] Equally, as American and its oneworld partners on the one side and Delta and SkyTeam on the other, jostle for position as JAL's future partners, the slot issue will also be vital. [19]
Bankruptcy proceedings usually lead to a sharp cut in the payment of sales receivable and other creditor claims. [24] The news was reported earlier Monday by Kyodo news and the Nikkei business daily, while Reuters reported last week that the E.T.I.C. had not ruled out bankruptcy. [31]
The broader Topix index lost 0.1 percent to 915.18, with more than two stocks falling for each that rose. The Topix gained 6.6 percent this year to yesterday, the smallest return among the world'''s 40 largest stock markets. [35]
SOURCES
1. Reuters - JAL shares touch record low on bankruptcy worries
2. JAL shares down 25 percent as bankruptcy worries mount | Reuters
3. JAL shares hit record low on bankruptcy worries | Reuters
4. Nikkei ekes out 4-month closing high, traders gain | Reuters
5. JAL Japan Airlines, lenders consider bankruptcy - eTurboNews.com
6. LEAD: Japan Airlines' turnaround plan may include liquidation option
7. Bankruptcy urged for JAL effort | The Japan Times Online
8. Japan Airlines Considers Chapter 11-style Bankruptcy
9. JAL faces bankruptcy option: report | News.com.au
10. Japan government plays it tough with Japan Airlines; slots a factor in immunity push? | Centre for Asia Pacific Aviation
11. JAL shares retest record low on bankruptcy worries | Business | Reuters
12. Bankruptcy option mooted for Japan Airlines | The Money Times
13. Japan Air Plunges to Record Amid Bankruptcy Reports (Update1) - BusinessWeek
14. AFP: Japan Airlines shares dive on bankruptcy fears
15. Japan Airlines''' Biggest Union Backs Pension Cut for Employees - Bloomberg.com
16. JAL's biggest union to accept benefit cuts | The Japan Times Online
17. JAL Plan Includes Bankruptcy Option, Nikkei Says (Update1) - Bloomberg.com
18. Japan Airlines Declines After Bankruptcy Reports (Update1) - BusinessWeek
19. JAL bankruptcy? Poised on a knife edge as the government plays hardball | Centre for Asia Pacific Aviation
20. JAL To Come Under Control Of Government Body As Early As January -Report
21. Turnaround body to decide on aid to Japan Airlines in mid-January
22. domain-b.com : JAL weighing bankruptcy
23. JAL fuel payments guaranteed if files for bankruptcy: Report - CNBC
24. Nikkei flat as JAL drags but set for gains in 2009 | Reuters
25. JAL shares reach record low on bankruptcy concerns; Hainan Airlines receive share placement approval | Centre for Asia Pacific Aviation
26. Japan Airlines shares hit record low amid bankruptcy rumours
27. JAL rehabilitation plan may include bankruptcy option | TopNews United Kingdom
28. Kyodo News - Story
29. Nikkei down after hitting 4-mth high, JAL weighs | Quotes | Company News | Reuters
30. JAL fuel payments to be guaranteed by fund -Nikkei | Reuters
31. Bankruptcy for JAL is considered by state fund | mydigitalfc.com
32. AIRLINE BIZ Blog | The Dallas Morning News
33. JAL: Next Huge Airline Bankruptcy? - DailyFinance
34. BBC News - Japan Airlines shares hit new low of 85 yen
35. Most Japan Stocks Fall as JAL Plunges to Record Low; Banks Drop - Bloomberg.com
36. JAL Might Soon be Declaring Bankruptcy | TopNews Singapore
37. Japan Airlines shares take a nosedive | Finance | Telstra BigPond News and Weather
38. Aircargo Asia Pacific - JAL delays cargo link?
39. FT.com / UK - JAL shares fall amid report of court restructuring threat
40. Japan Airlines looking for state bailout
41. Japanese stocks down in morning trade :
42. Focus on Travel News: Daily Travel News website and Newsletter - JAL Group 2010 New Year Vacation Period Traffic Forecast
43. JAL'''s Unions Support Pension Cut Proposal, Asahi Reports - Bloomberg.com
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